Center for Open Government: KY Supreme Court will have the final word on the Beshear administration's MCO mess

The Kentucky Supreme Court has decided it will have the final say on the Beshear administration’s mishandling of Kentucky’s multi-billion dollar Medicaid managed care contracts.

Last year, the Court of Appeals overturned a Franklin Circuit court decision that ordered Beshear’s Cabinet for Health & Family Services (CHFS) to re-bid the contracts.

The Bluegrass Institute’s Center for Open Government was the first organization to uncover the problematic role played by healthcare consultant Emily Parento in Molina Healthcare’s 2020 bid for the state’s Medicaid business. Parento served as a co-chair to the Beshear/Coleman CHFS transition team. After signing a non-disclosure agreement, Parento was granted access to review various documents that were part of CHFS’s 2019 MCO contract awards during the Bevin administration.

In its decision, the Franklin Circuit Court revealed that Parento submitted a report to Beshear’s office recommending rescinding the 2019 contract awards and issuing a new solicitation for bids. The questions surrounding the consultant’s role intensified after the Center for Open Government uncovered that Parento’s services were retained only after serving on the 2019 transition team.

Franklin Circuit Court found that the “appearance of impropriety” created by Parento’s involvement warranted the invalidation of the Beshear administration’s 2020 MCO RFP.

The appeals court disagreed, arguing that since the Kentucky Model Procurement Code (KRS 45a) doesn’t explicitly provide that an “appearance of impropriety” is a justification for nullifying an agency decision, the circuit court’s decision wasn’t “support(ed) in the law.”

And yet, as we wrote at the time, nothing in the Appeals Court decision exonerated Parento for her role in the controversy.

According to the circuit court, Ms. Parento discussed the 2019 RFP with Beshear’s Executive Cabinet Secretary and Chief of Staff. (Source) Also, the court believed Parento helped craft Molina’s RFP response based on work she performed for the transition team:

There was “a broad pattern of tailoring Molina’s submission in a manner that would maximize Molina’s chances of selection; while this is an appropriate course for a healthcare organization to take when trying to obtain an MCO contract, these actions in this particular case raise concerns regarding Ms. Parento’s level of knowledge and involvement while working on the transition team.” (Source)

Kentucky Registry of Election Finance's records show Parento and her husband have been generous contributors to Andy Beshear through the years, contributing nearly $10,000 to his election efforts since 2014. Parento maxed out to Beshear's 2019 gubernatorial campaign with $2,000 contributions for both the primary and general election.

Billions of dollars — and more importantly — how hundreds of thousands of Kentuckians get their health care are at stake in this lawsuit. It will be months before the Supreme Court renders a decision. However, taxpayers and anyone who believes ethical standards matter in awarding government contracts should applaud the justices for taking the case.